Charter Hall Direct Fund secures 12-year lease with Commonwealth at Moonee Ponds, Victoria

Charter Hall Group (Charter Hall or the Group) is pleased to announce that its Direct PFA fund (PFA or the Fund) has secured a new 12-year lease with the Commonwealth of Australia in Moonee Ponds, Melbourne.

The property, located at 1 Dean Street, is just 5.5 kilometres from Melbourne’s CBD and will accommodate the Commonwealth later this year, after Charter Hall undertakes a significant repositioning of the asset following the departure of Foxtel.

The four (4) storey building, which already holds a 5.5 Star NABERS Water Rating, will see over 280 solar panels installed, supplying 124kW of power to the building. The upgrade will achieve a minimum 4.5 Star NABERS Energy Rating, adding to the sustainability credentials of the asset. Comprehensive waste management practices will also be introduced, with waste from the redevelopment and office fit-out to be diverted from landfill.

Due for completion in August 2022, the upgrade works will create a new ground floor lobby design, cafe and arrival experience, as well as landscaping and high-quality End of Trip facilities.

Charter Hall Direct CEO, Steven Bennett, said, “This agreement is directly in line with our Fund’s strategy, with a focus on high quality office buildings underpinned by strong tenant covenants with government or well-regarded corporate tenants. We are pleased to welcome the Commonwealth to PFA through this strategic lease agreement, which builds on our commitment to sustainability and enhances PFA to over $2.4 billion in funds under management.”

“The leasing deal increases the defensive income profile of PFA, with over 60% of the Fund’s income profile secured by Australian government tenants.”

Charter Hall Direct Fund Manager, Julian Menegazzo, said, “We are thrilled to be providing the Commonwealth with a new, state-of-the-art, premium office space at 1 Dean Street, previously known as the ‘Foxtel Building’. This agreement will see 75% of the property leased prior to Foxtel’s departure and with significant upgrades, this building will be even more attractive to other tenant customers.”

The Charter Hall managed Direct PFA fund is a $2.4 billion unlisted property fund open for investment.

The Fund continues to outperform the industry benchmark, delivering a 12-month total return of 17.9% to 31 December 2021. PFA invests in a portfolio of Australian office properties anchored by government or well-regarded corporate tenants with the aim to provide investors with sustainable and stable, tax advantaged income and the potential for capital growth. The Fund currently provides over a 6.0% distribution yield per annum to PFA investors.